Rep. Conaway: Senate needs to follow House's lead on tax cuts

Published 2:23 pm, Thursday, August 2, 2012

Although the House approval on Wednesday of an extension to the Bush-era tax cuts is a step, Rep. Mike Conaway said a similar bill also needs to be passed in the Senate.

House representatives passed in a 256-171 vote a one-year extension to the current tax structure. The measure was approved after a plan sent over from the Senate that would have limited the tax cuts was voted down.

Democrats had proposed limiting the tax cuts to those making $250,000 a year or less. The measure would increase revenue, Democrats argue, and still allow for tax cuts among those in other brackets.

Conaway, and other Republicans, argue cuts need to remain for all levels if elected officials want to foster growth amid what, in some areas, is still a stunted economy.

"We have not recovered," Conaway said.

Because the two sides disagree on the issue, Conaway said they'll now need to continue negotiating. However, with a summer break starting after the close of this week, September is now the earliest the issue will be resolved.

Realistically, it could be December before a tax structure is agreed to, Conaway said.

In not making a decision sooner, Conaway said elected officials are creating a climate that makes it difficult for business leaders to plan for expansion.

"That further exacerbates the problems because the closer you get to a change in tax policy like that, the more unsettling it becomes," Conaway said. "The closer we get to that time frame, the more on the sidelines people sit. It more limits their ability to make business decisions."

President Barack Obama made the same argument a few years ago, Conaway said, but now has changed his tune.

"They're really the Obama tax cuts," he said, alluding to the fact that the tax structure was most recently approved while Obama was in office.

Democrats say the tax cuts are not needed at all levels. With a growing U.S. deficit, the shift would be helpful in generating revenue.

Conaway disagrees and said the deficit needs to be addressed through cuts to government spending.

"We've got a spending problem, not a tax revenue problem," he said. "We need to address it through the reduction in the size of government."

The tax rates that have become known as the Bush-era tax cuts were first approved in 2001.